Apparel and footwear brands Adidas and H&M are among 90 global companies that have responded to investor calls for more consistent and comparable workforce data, a request aimed at improving the quality of jobs worldwide and helping to tackle inequality and poverty.
Investment group ShareAction, in collaboration with SHARE (the Shareholder Association for Research and Education) and RIAA (Responsible Investment Association Australasia) and a coalition of more than 120 investors managing over US$13 trillion in assets, asked listed companies to disclose information about how they manage risks and harness opportunities in their direct workforce and supply chains as part of its Workforce Disclosure Initiative (WDI).
Matt Christensen, head of responsible investment at AXA, says the data collected against the WDI are used to provide in-depth and complementary information to its social performance and impact assessment. “It constitutes, as well, a solid basis for our engagement with companies around social considerations and helps us make processes evolve the right direction – both at operational and supply-chain levels.”
The number of disclosing companies doubled this year compared to last. In total, disclosing companies have a footprint in more than 100 countries where they employ upwards of 8.3m people and have business relationships with more than 1.5m suppliers.
According to a spokesperson, of the 90 that participated in the study, apparel and footwear brands included Adidas, Burberry, Kering and LVMH. However Nike, Moncler, Richemont and Walmart are among the apparel brands and retailers that failed to engage with the investor request.
The WDI seeks information from companies on topics including diversity, wages, health and safety, contracts, worker voice, and procurement practices. Investors are increasingly seeking this type of comparable data in order to engage with the workforce practices of investee companies. The WDI’s ultimate aim is to improve the quality of jobs in listed companies’ operations and supply chains.
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By GlobalDataJames Gomme, director of SDGs at World Business Council for Sustainable Development, says: “The WDI is already providing real insights into how to enhance workforce reporting and incentivise best practice. This area of focus is extremely necessary in the context of advancing some of the issues that sit at the heart of the SDG agenda. The WDI has also set out to undertake this work in a highly inclusive and impactful manner which equips both the investment and business communities with practical tools that can help to drive real change.”
Of the key findings this year, disclosures from companies were found to lack detail on risk management processes, with 51% providing no detail on who is involved in the workforce risk management process, how frequently it is carried out, or what areas of the business are covered – potentially a major concern for investors, particularly when identified risks relate to core human rights.
ShareAction said given “systemic challenges like inequality and precarious work,” the fact that much of the data lacked detail on how companies manage and protect low paid workers, subcontracted, and supply chain workers “warrants further investigation.” Only 24% of companies said they monitor wage levels for non-permanent, third-party or franchise workers, even though they are particularly vulnerable to poor conditions.
Shannon Rohan, responsible investment leadership director at SHARE says: “Better disclosure from companies about decent work practices is an opportunity for boards of directors and management to see the value of their workforce and how to improve workplace practices. For investors, promoting better assessment and reporting can help demonstrate the value of decent work for company performance. Too few companies provide meaningful reporting on their approaches to managing their workers, leaving investors ill-equipped to identify leaders and laggards.”
Amy Metcalfe, head of programmes at ShareAction, adds: “There are challenges to disclosing more workforce data. But the leadership shown by 90 companies across 11 sectors demonstrates that these challenges can and should be overcome. Not least because the reporting process provides insights that benefit corporate governance, and because calls from shareholders, civil society, and worker organisations for better data and action to deliver on the promise of decent jobs are only getting louder.”
The full report can be found here
